A Tale Of Two Cities: New Orleans After Katrina

The convention center reopened for its first citywide convention in June 2006 after a $60 million renovation – a small price to pay, considering the city lost $2 billion in business during the time the facility was closed.

The Super Dome – site of Super Bowls and home to the New Orleans Saints professional football team – received a $180 million renovation. 

The city’s famous Mardi Gras drew 800,000 people this year after a weak 2006 showing. But its pre-storm levels were a million plus. On a broader basis, however, visits are down sharply. The city attracted 10.4 million visitors in 2004 but just 3.6 million in 2006.

The city has yet to regain all of its major convention customers, but it has brought in some big ones, including the American College of Cardiology Conference in March, which drew 26,000.

"We’re really optimistic," says Schulz, sounding optimistic. "The experience of coming here as a vacation traveler or business traveler is very much the same."

That opinion is echoed throughout the hotel industry. All but about 4,000 of the industry’s 38,000 plus rooms are back on the market. Through June of this year, occupancy rates are up 6.9% from a year ago, but have not returned to what they were before Katrina.

Fred Sawyers, general manager of the Hilton Riverside and president of the Greater New Orleans Hotel & Lodging Association, says "the pocket that most people see is in great shape," which is counter to most images.

Sawyers' 1,616-room hotel has undergone $66 million in repairs and improvements since the storm, and is now targeting more corporate meetings to compensate for the loss of the bigger conference business.

Other big hotel names – Marriott, Ritz-Carlton – have also made investments.

Courtesy of Superdome

On the downside, however, is that the Hyatt (next to the Super Dome), Fairmont (which is undergoing a change in management) and Park Plaza (formerly a Radisson) hotels have yet to reopen. And a planned expansion of the convention center has been put on hold.

"We still have challenges," says Darrius Gray, the hotel association’s chairman and general manager of the Holiday Inn French Quarter. "We’re struggling to secure convention business." Gray says hotels are having to sacrifice on room rates a bit as well as offer incentive plans to attract business.

There have been other developments to brag about. Cruise line operator Carnival recently announced that it would keep its 2,056-passenger ship in New Orleans at least through 2008. In November, Southwest Airlines will add eight daily nonstop flights from New Orleans’ Louis Armstrong International Airport, where the number of daily flights is 75% of pre Katrina levels.

The Lost City

Though the hospitality industry has bounced back from the hurricanes of 2004, its recovery, as well as that of the overall economy, has been somewhat limited by the existing labor pool -- which will be a major factor in the future of New Orleans.

One of the cruel ironies of New Orleans today is that the labor market is tight, even though there is so much work to be done. Also worrisome is that job growth has slowed dramatically since an initial pop from the recovery.

In August 2005, the New Orleans metropolitan had 603,700 non-farm payroll jobs, according to the Bureau of Labor Statistics. Two months later – after Katrina and Rita – there were 425,800.

CONTINUED: Jobs. Jobs, Jobs

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